What is the Difference Between a Request for Proposal & a Request for a Quotation?

Both RFPs and RFQs are useful business tools when properly applied.
Both RFPs and RFQs are useful business tools when properly applied. (Image: business image by peter Hires Images from Fotolia.com)

Requests for proposals (RFPs) and requests for quotations (RFQs) are both important to corporate procurement processes. Companies use them as applicable to procure needed products and services. However, each has a very unique application in the procurement process.

Request for Proposal

A request for proposal is a document companies use to solicit bids on special projects or the development of a new product or service. Companies wishing to bid will review the RFP and then write a detailed proposal specifying how they will complete the project and the associated cost. After receiving several proposals, the company issuing the RFP can choose the best option.

Request for Quotation

A request for quotation is a document companies use to invite bids regarding the purchase of an existing product or service. Upon receiving bids, the company issuing the RFQ can compare and choose.

Key Differences

A RFP is used when the purchase or procurement involves a complex development project, such as a software development project or a construction project. Conversely, a RFQ comes into play when a company is simply looking to purchase an existing, or "off the shelf," product or service; in this case they can use the RFQ process to compare prices.

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